Rent-A-Roofer v. Farm Bureau Prop. & Cas. Ins. Co.

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Rent-A-Roofer, Inc. (Appellant) settled a lawsuit filed by the National Research Corporation (NRC) without notifying its insurer, Farm Bureau Property & Casualty Insurance Company (the Insurer), of the lawsuit. Appellant later notified the Insurer of its involvement in litigation and made a demand under Appellant’s policy with the Insurer. The Insurer declined coverage on the grounds that Appellant breached the policy’s notice provision and the voluntary payments provision. Appellant subsequently brought this action against the Insurer, alleging breach of contract and bad faith. The district court granted summary judgment for the Insurer. The district court first concluded that for an insurer to deny coverage based on breach of a voluntary settlement condition, the insurer must show prejudice in connection with its claim. The court then ruled that, where Appellant failed to meet both the notice and voluntary payments provisions, prejudice had been established as a matter of law. The Supreme Court affirmed, holding that the district court correctly found that the Insurer was not liable for settlement by NRC against Appellant and not liable for Appellant’s defense costs. View "Rent-A-Roofer v. Farm Bureau Prop. & Cas. Ins. Co." on Justia Law